Genting's Lim sounds out boost in Echo
Comments by the chairman of Malaysian gaming giant Genting suggest Mr Lim is serious about his investment in the Australian casino operator, even after it faces the loss of its Sydney monopoly later this decade to the James Packer-backed rival Crown.
In an interview in Kuala Lumpur with Bloomberg, Mr Lim said he had not decided how many Echo shares Genting would like to own, even as it holds out for a decision on the 10 per cent stake.
The Hong Kong arm of Genting has also sought approval to move to as much as 25 per cent in Echo, owner of Sydney's the Star casino.
Crown and Echo have been engaged in a bitter fight for the right to build new casinos in Sydney and Brisbane.
Mr Packer's proposal to build a luxury hotel and casino at Barangaroo on the edge of Sydney's central business district received the backing of the NSW government this month, ahead of Echo's rival plan to expand the Star.
"We have not formed any views yet [on the size of the stake], especially now that Mr Packer has sold his shares for the reason that he is working on a competing casino, and the state seems certainly very keen to see competition in NSW," Mr Lim said.
"All that are factors that, as an investor, we would have to take into consideration. So we have formed no views yet. We would cross that bridge after we've got our licence."
Mr Lim said the NSW and Queensland government approval process to move to 10 per cent of Echo was expected to take some time.
"We are just patiently waiting. It's a two-way process: they [state governments] would ask for more information and we would have to compile the information and we would feed them with it and they would ask more questions."
Analysts believe Genting, one of Asia's biggest casino operators, has the financial resources to support a full tilt at Echo.
Meanwhile, Mr Lim said Genting was sitting and watching Mr Packer's attempts at building a second casino in Sydney.
"He [Mr Packer], too, would have to go through the various process that I'm sure the government would set up to encourage investment to become real," he said. "Again, it will take some time."
The Genting group of companies has been expanding abroad, from the Bahamas to Manila, amid restrictions on gaming in Malaysia.
Meanwhile, Mr Lim said Genting would "love" to operate a casino in Macau but acknowledged the door was currently closed on new licences.
Shares in Echo last traded on Friday at $2.69.
Frequently Asked Questions about this Article…
K.T. Lim said he would be prepared to boost Genting’s stake in Australia’s Echo Entertainment beyond 10% if regulators gave the green light. He also said Genting has not yet decided exactly how many Echo shares it wants to own and that the group is patiently waiting for licence approvals. The article notes Echo shares last traded on Friday at $2.69.
Yes. The Hong Kong arm of Genting has sought approval to move to as much as 25% in Echo Entertainment, according to the article.
Regulatory approval is essential because Lim said any move past 10% would require sign-off from state regulators. He described the NSW and Queensland approval process as a two-way process that will take time, with governments requesting information and Genting responding before a licence decision is made.
The article highlights a bitter fight between Crown and Echo for the right to build new casinos in Sydney and Brisbane. It notes that Echo may lose its Sydney monopoly later this decade to the James Packer-backed Crown and that the NSW government backed Packer’s Barangaroo casino proposal. These competitive and regulatory dynamics are factors investors would need to consider when assessing Echo’s outlook, Lim said.
According to the article, Mr Packer sold his Echo shares because he is working on a competing casino project. Lim said that Packer’s move and the state’s apparent desire for competition are factors Genting will take into account as an investor.
Yes. The article reports that analysts believe Genting, one of Asia’s biggest casino operators, has the financial resources to support a full-tilt approach to Echo if it chose to do so.
Lim said the Genting group has been expanding abroad — from the Bahamas to Manila — amid restrictions on gaming in Malaysia. He also said Genting would 'love' to operate a casino in Macau but acknowledged the door is currently closed to new licences there.
Lim said the NSW and Queensland approval process to move to 10% (and any larger stake) was expected to take some time. He described it as a two-way process in which state governments ask for information, Genting compiles and submits that information, and regulators then ask further questions before making a decision.
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